GENEVA (Reuters) - Publication of a U.N. database of companies with business ties to Israeli settlements in the occupied West Bank has been delayed again, drawing the ire of activists who have campaigned for three years.

The issue is highly sensitive as companies appearing in such a database could be targeted for boycotts or divestment aimed at stepping up pressure on Israel over its West Bank settlements, which most countries and the United Nations view as illegal. Goods produced there include fruit, vegetables and wine.

Israel has assailed the database, whose creation was agreed by the U.N. Human Rights Council in March 2016, as a "blacklist".

Michelle Bachelet, U.N. High Commissioner for Human Rights, said on Tuesday that despite progress made since launching the study, further work was needed due to the "novelty of the mandate and its legal, methodological and factual complexity".

Her office aimed to finalise and issue the study "in coming months", she said in a letter to the Human Rights Council.

Activists voiced outrage, noting that Bachelet's predecessor, Zeid Ra'ad al-Hussein, had already delayed its publication in 2017 before stepping down in August 2018.

"Israeli authorities’ brazen expansion of illegal settlements underscores why the UN database of businesses facilitating these settlements needs to be published," Bruno Stagno Ugarte of Human Rights Watch said in a statement.

"Each delay further entrenches corporate involvement in the systematic rights abuses stemming from illegal settlements," he said, calling for Bachelet to commit to a clear publication date.

Palestinian rights groups and trade unions, in a letter dated Feb. 28, had urged Bachelet to publish the database, saying that further delays would undermine her office and foster what they called an "existing culture of impunity for human rights abuses and internationally recognised crimes in the OPT (Occupied Palestinian Territory)".

The World Jewish Congress said its CEO, Robert Singer, had met Bachelet last month and urged the cancellation of the database. The New York-headquartered group welcomed the delay to publication, saying in a statement the report should be put off for good as it would financially hurt thousands of employees, both Israeli and Palestinian, of targeted companies.

In November, home-renting company Airbnb said it would remove listings in Israeli settlements in the West Bank, a move that Israel called a "wretched capitulation" to boycotters and Palestinians hailed as a step towards peace.

Israel captured the West Bank in a 1967 war. Its settlements there are considered illegal by most world powers. Palestinians deem the settlements, and the military presence needed to protect them, to be obstacles to their goal of establishing a state. Israel disputes this.

(Reporting by Stephanie Nebehay; Editing by Frances Kerry)

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